Rare! Yahoo! revenue! growth! spotted! in! Q1!
It's alive! It's alive!
Yahoo! has reported a slight uptick in revenue and income in the first quarter of this year - the first time it's had any sales growth in the last three years.
Revenue lifted from $1.214bn (£759m) in the first quarter of 2011 to $1.221bn (£766m) in the same period this year, while net income grew from $225m (£140m) to $287m (£180m), according to the firm's filings.
New CEO Scott Thompson also talked to investors and media about the next steps in restructuring the troubled web firm.
"Yahoo! has been doing way too much for too long and was only doing a few things really well," he said in an earnings call, adding that the company wanted to get back to its core businesses.
The firm has now been divided into three main groups: consumer, technology and regions. While rejigging the leadership structure is all very well, shareholders have been agitating for bigger upheaval in the company, including sales of some assets and new directors for the board.
Thompson did announce five new independent directors for the board, but none of them were on activist investor Dan Loeb's list.
In February, Loeb, head of hedge fund Third Point, tried to rally his fellow stock-owners to get himself and three of his nominees onto the board.
"Installing the hand-picked choices of the current board does nothing to allay investor fears that Yahoo! is poised to repeat the errors of its past," he said in a filing with the Securities and Exchange Commission.
Loeb called for his own appointment along with Harry Wilson, chairman and CEO of corporate restructuring house MAEVA Group; Michael Wolf, CEO of consulting firm Activate; and Jeffrey Zucker, formerly the CEO of NBC Universal.
"After a thorough review of a broad range of highly qualified candidates by our nominating and corporate governance committee, our board has appointed five new members," Thompson announced in the earnings call today.
The winning directors are Alfred Amoroso, former president and CEO of Rovi Corporation; John Hayes, chief marketing officer at American Express; Peter Liguori, former chairman and president of entertainment at Fox Broadcasting Company; Thomas McInerney, former CFO of internet company IAC; and Maynard Webb, chairman of software firm LiveOps.
However, Thompson did have some good news for Loeb and Third Point, who have also been trying to get Yahoo! to sell off some assets and secure some money for shareholders.
"On our Asian assets, we are continuing to pursue active discussions with Alibaba," he said. "We are currently exploring a simplified transaction structure, which if executed would provide greater certainty of closing to monetise a portion of our Alibaba stake."
But things aren't going so well in its discussions with Softbank, part owner of Yahoo! Japan.
"While we also plan to continue exploring alternatives to unlock the value of our Yahoo! Japan stake for shareholders, any transaction has to be at a value that makes sense for Yahoo! and its shareholders.
"We currently have a valuation gap with respect to the Yahoo! Japan stake that we have not been able to bridge. Given that, we are focusing on our discussions with Alibaba and we're not in a position to provide further details or certainty on today's call," Thompson explained.
Yahoo!'s recent legal moves against Facebook also got a mention, with Thompson standing firm on the company's decision to sue the social network over patents.
"Yahoo!'s IP is one of the foundations of our business and our future growth. Other leading companies license our patented technologies and Facebook must do the same or change the way it operates," he said.
The web firm had already announced plans to lay off around 14 per cent of its employees - 2,000 in total - and Thompson said in the call that Yahoo! would also shut down or "transition" about 50 properties that do not contribute meaningfully to user engagement or revenue.
None of Thompson's steps in Yahoo!'s revival are terribly groundbreaking, but the former PayPal president seemed confident that the company's new more profitable self was right around the corner.
"I've become more convinced than ever of the value of our assets, the potential of this business and what we can do to make the most of Yahoo!'s huge market opportunity," he enthused. ®